Learn more about business with this collection
Essential product management skills
How to work effectively with cross-functional teams
How to identify and prioritize customer needs
Startups VS traditional businesses
In today's world, everyone knows what a startup is, but what they don't know is that a startup is different from a traditional business. Unlike established businesses, startups have many uncertainties in their path to success.
Many people think that startup is all about developing a bridge between the problems faced by the consumers and the solution to them, but this is not true. A successful startup should have a solution to a problem statement as well as a system in their company.
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The build-measure-learn loop
Build- You build a product
Measure- You test the product in the market
Learn- You gain validated learning from your target audience regarding your product fit in the market.
And after gaining insight through your validated learning, one has to work on the downsides of the product and then measure the product again on the respective market and learn. The cycle continues until the company has shaped the product as good as perfect.
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Build an MVP for testing the market
MVP stands for minimum viable product. To test your product in the market for the very first time you need to build a basic prototype of your product incorporated with needful and USP features.
One has to make an MVP first and continuously innovate through early feedback to make a final product that can be released into the market as a flagship product.
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Growth engines
The engines of growth are used to grow your startup using one or more of the three growth engines to retain customers in the long run.
The three growth engines are:
- Sticky
- Viral
- Paid
If you get a lot of customers but a large chunk of them churn, then the engine is not working and you need to switch it.
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Sticky growth engine
This makes the customers stick to the product and the customers generally don't leave until dissatisfied.
WiFi providers use this engine to retain customers.
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Viral growth engine
This engine focuses on "person-to-person" transmission as a consequence of normal product use. In this engine, the customers do not have to consciously spread the word for the product, instead in their normal use, they unknowingly market the product.
Hotmail used this engine of growth.
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Paid growth engine
This engine considers spending tonnes of money on acquiring customers for the long term. This engine makes the customer habituated to the product and once they have developed a taste of the product, they cannot go back. The cost involved in acquiring a customer is also known as CAC (Customer Acquisition Cost).
In this engine of growth, the companies spend millions of dollars giving freebies to new customers to habituate them to the product.
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Companies like Swiggy, Zomato, and Ola in India used paid growth engine to make customers for themselves. In the initial cash drain phase, they gave freebies and in the control phase, they stopped giving discounts and used their data to attract them again to the product. They took charge of the customers as it became impossible for them to turn back.
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Pivot or persevere?
One major deciding factor for a successful startup is pivoting at the right time. Startups use the build-measure-learn loop to walk toward their goal. But if they keep continuing and every time the market turned down the product, then the startup should try to pivot and take a new path with the MVP.
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IDEAS CURATED BY
CURATOR'S NOTE
A startup's success path is full of uncertainty and their is no defined pipeline to make a startup successful. But there are some strategies used by many companies to help them grow their company. This book brings those strategies to you.
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Curious about different takes? Check out our The Lean Startup Summary book page to explore multiple unique summaries written by Deepstash users.
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